Elks sue leaseholder in Saddleback Inn dispute

A fire ripped through the vacant Saddleback Inn on First Street on March 29. Around 75 firefighters battled the blaze for several hours. FILE PHOTO: KEVIN WARN, FOR THE REGISTER

SANTA ANA – The Elks Building Association of Santa Ana, which owns the land on which the burned-out Saddleback Inn sits, has sued the owner of the vacant hotel, alleging breach of its lease.

The Orange County Superior Court lawsuit, which seeks unspecified damages and indemnity from damages, alleges that Saddleback Inn LLC and J.K. Properties Inc. breached terms of the lease of the land on which the hotel sits by allowing it to fall into disrepair.

"We're protecting the Elks' rights and interests, and trying to move forward in the most efficient way possible," said Kevin A. Day, an attorney for the Elks. "The lease had clear requirements that have been breached, and we have to protect the Elks' interests."

Kevin B. Jones, attorney for J.K. Properties Inc. and for Saddleback Inn LLC, a subsidiary, said Friday he had not yet seen the April 17 lawsuit.

"As we see the facts, the Elks are ultimately liable for the debacle which has transpired during the past 10 years," he said. "Accordingly, we will vigorously oppose any such lawsuit and will assert our own claims against the Elks by way of a cross-complaint."

The Elks own the land on which the Saddleback Inn sits, on the 1600 block of East First Street, adjacent to the Elks Lodge.

The Elks began leasing the property to the original tenants beginning in 1963, through a 55-year lease term that continues through 2018, for operation of a hotel. J.K. Properties acquired the lease in 2002, the suit said. The lease required the tenants to keep the buildings in good repair.

After assuming the lease, Saddleback Inn and J.K. used the property as apartment buildings through 2005-2006, the suit said. The city contacted them, noting that the property wasn't zoned for apartments. After that, the suit said, the property became vacant.

After a January 2011 fire did extensive damage to a building on the south side of the property, a demolition order was issued, but an Orange County judge ordered Santa Ana to allow the owners the option to repair the property. The south-side building was ultimately demolished.

Contending that problems at the property hadn't been resolved, the city in November sued to place the long-abandoned Saddleback Inn property under a receiver. The lawsuit listed such problems as rotting wood, rusting metal and vagrants.

A judge in January approved appointment of a receiver, Mark S. Adams of California Receivership Group, and requested two plans: one for demolition of the remaining three structures, and one for their repair.

On March 29, fire again struck the Saddleback Inn, ravaging the main building and resulting in the destruction of the second story, as well as the demolition of a pedestrian bridge across First Street.

Days later, Judge John C. Gastelum gave the receiver permission to borrow $750,000 against the property to cover demolition of the bridge and Inn buildings.

In one of a series of periodic reports to the court, Andrew F. Adams of California Receivership Group said a plan had been submitted to the South Coast Air Quality Management District for asbestos removal. Because of the extensive damage to the main building, materials from the second floor will have to be hauled away as hazardous waste.

A fire ripped through the vacant Saddleback Inn on First Street on March 29. Around 75 firefighters battled the blaze for several hours. FILE PHOTO: KEVIN WARN, FOR THE REGISTER
On March 31, demolition crews took down a pedestrian bridge to the fire-damaged Saddleback Inn over First Street in Santa Ana, two days after a fire gutted the abandoned hotel. FILE PHOTO: JEBB HARRIS, ORANGE COUNTY REGISTER
A fire struck the Saddleback Inn in Santa Ana late March 29. It left extensive fire and water damage. This is how it looked on April 1. FILE PHOTO: RON GONZALES, ORANGE COUNTY REGISTER
A fire struck the Saddleback Inn in Santa Ana late March 29. This is a view of the damage in a photo taken three days later. FILE PHOTO: RON GONZALES, ORANGE COUNTY REGISTER

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